May 2022

The Total Economic Impact™ Of 6sense Revenue AI

Cost Savings And Business Benefits Enabled By 6sense Revenue AI

Revenue technology can identify opportunities that are more likely to close, helping marketing and sales teams optimize their efforts. Increasingly focusing on these opportunities leads to larger deals, shorter sales cycles, and — ultimately — higher revenues.

6sense Revenue AI is a comprehensive platform that puts the power of AI, big data, and machine learning in the hands of every member of the revenue team. With 6sense, revenue teams can capture anonymous buying signals throughout the buyer’s journey, target the right accounts at precisely the right time, and boost revenue performance with AI-driven recommendations for the channels and messages most likely to convert. 6sense Revenue AI removes the guesswork that creates waste and inefficiency in the day-to-day work of marketing, sales, and customer success.

6sense commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying 6sense Revenue AI.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of 6sense on their organizations.

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed nine decision-makers with experience using 6sense Revenue AI. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization.

Prior to using 6sense Revenue AI, these interviewees noted how their organizations’ marketing and sales practices had stagnated. The revenue teams’ status quo practices were not meeting goals, and technology further hampered the teams. The interviewees sought to jumpstart pipeline — and ultimately revenue — growth as well as improve their revenue teams’ procedures.

After investing in 6sense Revenue AI, the interviewees and their teams increasingly focused on opportunities the platform identified as 6sense Qualified Accounts (6QA). Opportunities might be flagged for any number of reasons. Often, the accounts showed greater intent to purchase. Pursuing these opportunities instead of leads from other sources had numerous positive effects, including increased average contract values, decreased average sales cycles, and increased topline revenue as the revenue teams optimized their resources.

Consulting Team:
  • Jeffrey Yozwiak, Benjamin Corey

Key Findings

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    ROI
    454%
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    BENEFITS PV
    $3.18M
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    NPV
    $2.61M
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    PAYBACK
    <6 months

Key Findings

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Higher sales revenue by pursuing 6QA opportunities in Year 3:
4X

Quantified benefits and costs are adjusted for risk to account for variation across organizations (both the interviewees as well as new organizations deploying the solution). In additional, financial sums are discounted by 10% per year to calculate present value (PV).

Quantified benefits. Three-year, risk-adjusted PV quantified benefits for the composite organization include:

  • Prioritizing 6QA opportunities resulted in sales revenues up to four times higher.

    Interviewees reported that 6QA opportunities were more likely to close and had higher average contract values. While the benefits varied based on the interviewees’ industries and other firmographics of their organizations, the aggregated data suggested that 6QA opportunities were often four times more likely to close than non-6QA opportunities and frequently had contract values two times higher. In addition, several interviewees reported at least a 20% increase in opportunity volume as 6sense Revenue AI helped them detect new opportunities and optimize their marketing efforts. By increasingly focusing on 6QA opportunities, the revenue teams delivered significant gains in profits for their organizations.

  • Prioritizing 6QA opportunities for marketing initiatives reduced the aggregate cost to qualify an opportunity by 40%.

    Interviewees reported that marketing teams changed their strategies and tactics to take advantage of insights from 6sense Revenue AI. Because 6QA leads were more likely to convert to opportunities, targeting them was a highly cost-effective way to spend their limited budgets and time. By realizing better results from equivalent spending, the marketing teams reduced their overall costs.

  • Prioritizing 6QA opportunities during sales reduced the effort to close an opportunity by up to 40%.

    6QA opportunities often had shorter sales cycles. By leveraging 6sense to remove the guesswork and prioritize which accounts to pursue, salespeople improved their productivity. Furthermore, the relationships between sales and marketing improved after adopting 6sense Revenue AI. The groups pursued opportunities together — as unified revenue teams — for even greater results.

“As you get more comfortable with the 6sense data, your confidence with it grows. [And] my confidence is based on conversion rates[:] When I saw that conversion rates are higher for in-market accounts than not, [I knew I could] trust it.”

VP, marketing strategy and marketing operations, marketing

Costs. Risk-adjusted PV costs include:

  • 6sense platform license costs comprising 81% of total costs.

    Licensing costs may vary depending on usage and scope of the deployment (e.g., features, number of user seats, etc.).

  • Initial platform deployment over one fiscal quarter and then regular upkeep in subsequent years.

    The 6sense models should be trained on an organization’s historical sales data and customized to the organization’s business model before being widely deployed. 6sense performs the model training work, but organizations should still review and partner with 6sense to ensure optimal performance. The models also benefit from semiannual checkups, again in partnership with 6sense.

  • User training of up to 10 hours initially and then two to five hours per year, depending on the user.

    User training to use 6sense Revenue AI is not more extensive than for other new technologies. However, organizations should consider budgeting additional time for change management.

The decision-maker interviews and financial analysis found that a composite organization experiences benefits of $3.18 million over three years versus costs of $574,000, adding up to a net present value (NPV) of $2.61 million and an ROI of 454%.

Voice Of The Customer

“I trust the product because I’ve spent hours and hours with the team. I know they have hundreds of models running simultaneously to deliver an algorithm that adds value. [And] I trust their expertise — I understand it, and they’ve invested the time to help me understand it.”

VP marketing strategy and marketing operations, marketing

“It’s really exciting to be a part of and see the adoption and the synergies between the marketing and sales teams. 6sense makes it easier for us to enable sales to be more impactful — to give them the information they need to be successful. It’s definitely made our relationship stronger and help us be more aligned.”

Head of marketing operations, networking

“I don’t think there’s really an area of the company where you can’t leverage [6sense]. We’ve disseminated [the platform] throughout our organization, bringing [insights] directly to salespeople [and] to marketers.”

Manager, marketing operations, professional services

6sense benefited organizations in two ways: 1) by helping them increase sales revenues (i.e., profit maximization), and 2) by helping them decrease costs (i.e., marketing optimization and sales optimization).

Benefits (Three-Year)

Cash flow analysis for the composite organization shows payback within two fiscal quarters and ROI increasing steadily thereafter.

Financial Summary

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TEI Framework And Methodology

From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in 6sense Revenue AI.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that 6sense Revenue AI can have on an organization.

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    DUE DILIGENCE

    Interviewed 6sense stakeholders and Forrester analysts to gather data relative to 6sense Revenue AI.

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    DECISION-MAKER INTERVIEWS

    Interviewed nine decision-makers at organizations using 6sense Revenue AI to obtain data with respect to costs, benefits, and risks.

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    COMPOSITE ORGANIZATION

    Designed a composite organization based on characteristics of the interviewees’ organizations.

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    FINANCIAL MODEL FRAMEWORK

    Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the decision-makers.

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    CASE STUDY

    Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

DISCLOSURES

Readers should be aware of the following:

This study is commissioned by 6sense and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in 6sense Revenue AI.

6sense reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

6sense provided the customer names for the interviews but did not participate in the interviews.

Interviewed Decision-Makers

Interviewee Industry Region Employees Years Implemented
VP, strategic marketing and demand generation Professional services Headquartered in North America with global operations 101 to 500 employees Three to four years
Manager, marketing operations Professional services Headquartered in North America with global operations 101 to 500 employees Three to four years
VP, growth marketing Cybersecurity Headquartered in North America with global operations 501 to 1,000 employees One to two years
Senior manager, marketing operations Cybersecurity Headquartered in North America with global operations 501 to 1,000 employees One to two years
Head of marketing operations Networking Headquartered in North America with global operations 5,001 to 10,000 employees Two years
VP, marketing strategy and marketing operations Marketing Headquartered in North America with global operations 1,001 to 5,000 employees One year
Senior manager, marketing Media Headquartered in North America with global operations Over 10,001 employees Three years
Product manager Media Headquartered in North America with global operations Over 10,001 employees Three years
Director, demand generation Cybersecurity Headquartered in North America with global operations 501 to 1,000 employees Two years
“We just really wanted to take our marketing to the next level [so that sales] could have very targeted conversations [with] customers ... and really meet the need that [customers] were facing.”

Director, demand generation, cybersecurity

Key Challenges

Interviewees said that their revenue teams struggled to jumpstart revenue growth before they invested in 6sense Revenue AI. Their teams’ previous marketing and sales practices — some of which had been optimized for a predigital era — were no longer effective. Moreover, subpar technology supported the teams — their revenue technology stacks were siloed and they were wasting time on manual work.

The interviewees described the following challenges:

  • Status quo marketing and sales practices were ineffective.

    Interviewees reported that sometimes sales received leads that were low-quality or incorrectly qualified. The director of demand generation at a cybersecurity firm explained: “[Marketing] was just shooting in the dark, right? ... Before we had 6sense, we made assumptions about what people were interested in. ... And sometimes that worked. [But] getting [prospects] hooked [in the] initial conversation when we have a full portfolio [of products and services] was definitely challenging.” Interviewees struggled to increase not just pipeline quantity, but also quality.

  • There was no collaboration between sales and marketing.

    Interviewees said that low collaboration between sales and marketing had contributed to their organizations’ difficulties. The VP of growth marketing in cybersecurity explained, “We actually had failed [account-based marketing] (ABM) attempts in the past before [6sense], and it was because marketing tried to do it as a marketing effort and [did not bring] sales along for the ride.” They added: “[Before 6sense,] sales reps weren’t notified when there was significant activity from accounts they owned. There just wasn’t two-way communication between sales and marketing.”

  • Current revenue technology did not meet the teams’ needs.

    Interviewees said their technology stacks often consisted of siloed point solutions, and one organization even built its own solution. There were significant issues with data quality, and the tools required revenue teams to still perform substantial manual work.

    Two of the interviewees noted their organizations tried to implement ABM in the past with other tools. But as the product manager in media explained: “ABM was pretty siloed and [had only] pocketed use [by just one team]. And it was pretty traditional ABM. ... They were using [another platform, but] the rest of the business wasn’t using [it and,] for the most part, usage was spotty.”

Voice Of The Customer

“We put the 6sense code and [another platform’s] code on our website [to see which platform] deanonymized the biggest percentage of web visitors, and 6sense just blew that out of the water.”

VP, growth marketing, cybersecurity

“The match rates, obviously, vary depending on the customer segment, but 6sense was significantly a few percentage points above the [other options], which was a big validation for us because we do have such a varied customer base.”

Senior marketing manager, media

“We had a much better match rate or coverage with 6sense.”

Product manager, media

Solution Requirements

The interviewees’ organizations searched for a solution that could:

  • Spur pipeline (and ultimately revenue) growth.

    All interviewees wanted to improve results at every stage of the B2B revenue waterfall. The interviewees at organizations that had experimented with ABM and intent data in the past had seen potential in the strategies but had struggled to scale them. And the interviewees with existing revenue technology in place (i.e., for ABM) wanted tools that would deliver superior results. In many cases, the interviewees ran head-to-head comparisons between 6sense Revenue AI and alternative tools. Interviewees performed significant due diligence to evaluate 6sense performance and results.

  • Support digital engagement and transformation.

    Two interviewees described how the COVID-19 pandemic created an urgent need to improve their revenue teams’ digital practices. At least temporarily, marketing stopped holding events and salespeople stopped visiting their customers. The director of demand generation in cybersecurity explained: “The ways we did things completely and totally changed, right? [But] we were able to adapt a lot better than if we hadn’t had 6sense in place. ... I feel like we were really lucky that we had [6sense already] implemented [and] integrated with the rest of our systems.”

  • Give their revenue teams competitive advantages.

    To compete against larger companies, the smaller organizations needed to use their resources — both their marketing budgets and their employees’ time — optimally. The head of marketing operations in networking explained: “We compete with companies that have a lot [more] revenue [and] bigger brand recognition. With a tool like 6sense, we really feel like we’re able to compete with them without breaking the bank.”

“The sales team was relatively new and was trying to manage 90,000 accounts. They needed a tool that would help determine which accounts are in a buying cycle.”

Head of marketing operations, networking

Composite Organization

Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the nine decision-makers that Forrester interviewed and is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:

  • Description of composite.

    The composite organization is an innovative, fast-moving company within its industry. It has a market valuation over $100 million and around 500 employees. The composite organization’s primary customers are other businesses. It targets a $500 million market. In this target market, there are about 1,000 opportunities annually, and the target average contract value is $500,000.

  • Deployment characteristics

    Initially, the composite organization’s revenue team includes six marketers, 12 salespeople, and a few senior marketing operations managers. However, the marketing and sales teams do not collaborate. Similarly, the teams’ technology stacks are fragmented — there are multiple point solutions, including a legacy ABM platform.

When the composite organization invests in 6sense Revenue AI, the senior marketing operations managers oversee the platform’s deployment and the initial training of the 6sense models. The composite organization increases its investment in 6sense over time (i.e., by deploying additional features). The composite organization onramps both the marketers and salespeople on the platform in Year 1.

Key assumptions
  • $500 million target market
  • Six marketers
  • 12 salespeople

Total Benefits

Ref. Benefit Year 1 Year 2 Year 3 Total Present Value
Atr Profit maximization $350,000 $696,500 $1,151,500 $2,198,000 $1,758,941
Btr Marketing optimization $8,631 $34,812 $79,415 $122,857 $96,282
Ctr Sales optimization $301,600 $549,229 $799,889 $1,650,718 $1,329,059
Total benefits (risk-adjusted) $660,231 $1,280,541 $2,030,804 $3,971,576 $3,184,282
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Benefits Of 6QA

In comparison to non-6QA opportunities, 6QA opportunities have:

  • 2x higher average contract value.
  • 4x higher win rate.

Profit Maximization

  • Evidence and data.

    The interviewees said that utilizing 6sense Revenue AI throughout their marketing and sales teams improved outcomes at multiple stages in their revenue generation processes. 6sense’s predictive models identified opportunities that were higher value and more likely to close sooner — in other words, opportunities that should be priority targets for the revenue teams’ limited resources. Increasingly focusing on these opportunities, which 6sense refers to as 6sense Qualified Accounts (6QA), helped the interviewees’ organizations increase their revenues.

    Interviewees reported different improvements depending on their organizations’ business models and other firmographics. Example benefits are below (and are organized by stage in the B2B revenue waterfall):

    • Increased opportunity volume:
      • Three fiscal quarters after deployment, a 31% increase in opportunity volume.
      • A 30% increase in cross-sell opportunities.
    • Increased conversion rates for qualified opportunities:
      • A 100% increase in conversion rate to marketing-qualified leads.
      • Increases in the volume of marketing-qualified leads of 20% and 30%.
      • A 30% increase in qualified opportunity volume.
      • A 100% increase in engagement from qualified opportunities.
      • 6QA accounts were 800% more likely to lead to an opportunity during the same quarter than non-6QA accounts.
      • 6QA accounts were 100% more likely to lead to an opportunity than non-6QA accounts.
    • Increased win rates, shorter sales cycles, and larger deal sizes:
      • A 27% increase in overall opportunities won after three fiscal quarters.
      • A 23% shorter sales cycles overall.
      • Deals that were 60% larger.
  • Modeling and assumptions.

    For the composite organization, Forrester assumes:

    • The composite organization is targeting a $500 million market.
    • In this market, there are 1,000 possible opportunities each year, and the average contract value (ACV) of a target opportunity is $500,000.
    • The composite organization has an operating margin of 10%.

    Before the composite organization deploys 6sense:

    • The marketing team detects, engages, and qualifies 12.5% of possible opportunities each year (i.e., only 12.5% of opportunities convert to marketing qualified leads [MQLs]).
    • The ACV of qualified opportunities is $250,000 — half the ACV of target opportunities. That is, there are larger deals in the market, but the opportunities that marketing is currently qualifying are smaller. The revenue team wants to pursue both more deals and larger deals.
    • The sales team closes 13% of the opportunities in its pipeline.

    After the composite organization deploys 6sense:

    • Marketing detects, engages, and qualifies more opportunities. With 6sense Revenue AI, the marketing team detects previously hidden intent signals and runs more efficient and effective campaigns. Marketing qualifies 20% more opportunities each year as the 6sense predictive models improve.
    • 6sense models also identify opportunities that are 6QA. 6QA opportunities are four times more likely to close than non-6QA opportunities, and they have an ACV two times higher.
    • In Year 1, 20% of qualified opportunities are 6QA; in Year 2, 30% are 6QA; and in Year 3, 40% are 6QA. The revenue team increasingly focuses on 6QA opportunities because they are more likely to close and have a higher value. However, many opportunities remain non-6QA. Some opportunities may be created in situations outside the scope of 6sense’s models — for example, live events or informal, personal networks.
    • As the revenue team focuses more and more of its efforts on 6QA opportunities, the aggregate ACV of opportunities in its pipeline increases. The aggregate win rate also increases.
    • Accordingly, sales revenue increases. The incremental profits are counted as a benefit.
  • Risks.

    This benefit may vary for the following reasons:

    • The target market, target opportunities, and target ACV are all organization-specific variables. Readers can approximate these values for their own organizations with back-of-the-envelope math.
    • Conversion rates at every stage of the B2B revenue waterfall are organization-specific and can be influenced by a variety of factors other than 6sense. Forrester’s model for the composite organization represents the experiences of the interviewees. These organizations were in a variety of industries, and so Forrester’s model is industry-agnostic. However, interested readers can tailor Forrester’s calculations to their own organizations by substituting (where appropriate) their own data or industry benchmarks. Readers can also be more conservative in their assumptions.
    • The degree of focus on 6QA opportunities over non-6QA opportunities may vary. Organizational change often takes longer at larger organizations. According to the interviewees, their marketing teams adopted 6sense before their sales teams. At the two largest organizations, the sales teams had not yet embraced 6sense.

      Tables RA and RB compare revenue from 6QA opportunities to revenue from non-6QA opportunities for the composite organization. Interested readers can model the effects of allocating more (or less) effort to 6QA opportunities by varying the percentage of opportunities that are 6QA in Table RA (but the percentage of opportunities that are 6QA should not be set too high — in practice, extreme values such as 100% are unrealistic).

  • Results.

    To account for these risks, Forrester adjusted this benefit downward by 30%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.8 million.

Voice Of The Customer

“Focusing on 6QA [accounts] helped [make] what we were doing work [even] better.”

Senior marketing manager, marketing operations, cybersecurity

“There is a higher deal size anecdotally. The sales team likes the tool. They come and bug my team a lot, saying, ‘Can you help us with this deal?’”

Head of marketing operations, networking

“The other thing is data. 6sense has helped us with enrichment. … It has helped us understand the landscape [of accounts in] our CRM.”

Head of marketing operations, networking

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Composite Organization

By increasingly pursuing 6QA opportunities, the composite organization realizes:

  • 20% increase in opportunity volume.
  • 20% increase in aggregate average contract value (ACV) by Year 1, 30% increase in ACV by Year 2, and 40% increase in ACV by Year 3.
  • 20% increase in aggregate win rate by Year 1, 50% increase in win rate by Year 2, and 70% increase win rate by Year 3.
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Profit Maximization

Ref. Metric Source Year 1 Year 2 Year 3
A1 Target market Assumption $500,000,000 $500,000,000 $500,000,000
A2 Target opportunities Assumption 1,000 1,000 1,000
A3 Target ACV A1/A2 $500,000 $500,000 $500,000
A4 Before 6sense: Percentage of opportunities detected and qualified Assumption 12.5% 12.5% 12.5%
A5 Before 6sense: Qualified opportunities A2*A4 125 125 125
A6 Before 6sense: ACV of qualified opportunities A3/2 $250,000 $250,000 $250,000
A7 Before 6sense: Qualified pipeline A6*A5 $31,250,000 $31,250,000 $31,250,000
A8 Before 6sense: Win rate Assumption 13.0% 13.0% 13.0%
A9 Before 6sense: Opportunities closed/won A5*A8 16 16 16
A10 Subtotal: Before 6sense: Sales revenue A6*A9 $4,000,000 $4,000,000 $4,000,000
A11 After 6sense: Percentage of opportunities detected and qualified Y1: A4*(1+20%); Y2 and Y3: A11PY*(1+20%) 15.0% 18.0% 21.6%
A12 After 6sense: Qualified opportunities A2*A11 150 180 216
A13 After 6sense: ACV of qualified opportunities (RA3*RA4+RB3*RB4)/A12 $300,000 $325,000 $349,537
A14 After 6sense: Qualified pipeline RA5+RB5 or A12*A13 $45,000,000 $58,500,000 $75,500,000
A15 After 6sense: Win rate (A12*RA2*RA6+A12*RB2*RB6)/A12 16.0% 19.0% 22.0%
A16 After 6sense: Opportunities closed/won RA7+RB7 or A12*A15 24 34 47
A17 Subtotal: After 6sense: Sales revenue RAt+RBt $9,000,000 $13,950,000 $20,450,000
A18 After 6sense: Incremental sales revenue A17-A10 $5,000,000 $9,950,000 $16,450,000
A19 Operating margin Assumption 10.0% 10.0% 10.0%
At Profit maximization A18*A19 $500,000 $995,000 $1,645,000
Risk adjustment ↓30%
Atr Profit maximization (risk-adjusted) $350,000 $696,500 $1,151,500
Three-year total: $2,198,000 Three-year present value: $1,758,941

Revenue From 6QA opportunities

Ref. Metric Source Year 1 Year 2 Year 3
RA1 After 6sense: Qualified opportunities A12 150 180 216
RA2 Percentage of qualified opportunities that are 6QA Assumption 20% 30% 40%
RA3 Qualified opportunities that are 6QA RA1*RA2 30 54 86
RA4 ACV of qualified opportunities that are 6QA A3 $500,000 $500,000 $500,000
RA5 Qualified pipeline that is 6QA RA3*RA4 $15,000,000 $27,000,000 $43,000,000
RA6 Win rate for 6QA opportunities Assumption 40% 40% 40%
RA7 6QA opportunities closed/won RA3*RA6 12 22 34
RAt Subtotal: Revenue from 6QA opportunities RA7*RA4 $6,000,000 $10,800,000 $17,200,000

Revenue From Non-6QA Opportunities

Ref. Metric Source Year 1 Year 2 Year 3
RB1 After 6sense: Qualified opportunities A12 150 180 216
RB2 Percentage of qualified opportunities that are non-6QA 100%-RA2 80% 70% 60%
RB3 Qualified opportunities that are non-6QA RB1*RB2 120 126 130
RB4 ACV of qualified opportunities that are non-6QA A6 $250,000 $250,000 $250,000
RB5 Qualified pipeline that is non-6QA RB3*RB4 $30,000,000 $31,500,000 $32,500,000
RB6 Win rate for non-6QA opportunities RA6/4 10% 10% 10%
RB7 Non-6QA opportunities closed/won RB3*RB6 12 13 13
RBt Subtotal: Revenue from non-6QA opportunities RB7*RB4 $3,000,000 $3,150,000 $3,250,000

Marketing Optimization

  • Evidence and data.

    Interviewees said that they used 6sense to market more efficiently and effectively. The interviewees reported the following experiences:

    • Reduced customer acquisition costs.

      The interviewees from the professional services industry noted their organization measured its marketing effectiveness by tracking the number of MQLs per closed deal. The VP of strategic marketing and demand generation at the firm said that that number had dropped by nearly 50% within two years of implementing 6sense.

    • Higher conversion rates from 6QA accounts.

      The VP of marketing strategy and marketing operations in the marketing industry said: “We’ve definitely seen a two-times increase in conversion. We’re not doing anything different other than leveraging [6sense and targeting] in-market [6QA] accounts.”

    • Improved strategies due to better visibility.

      The VP of growth marketing in cybersecurity explained how their organization had changed its marketing strategy: “[Before,] we depended on [prospects] filling out forms, [so] that was the only visibility we had. We now look at every page [on our website as part of] the funnel.”

    • Optimized spending.

      The head of marketing operations in networking explained: “6sense definitely gives us the opportunity to reach different audiences across different channels [and] different sites. ... We would not be able to afford [that] type of impact otherwise.”

  • Modeling and assumptions.

    For the composite organization, Forrester assumes:

    • Six marketers use 6sense, and the average annual salary of a marketer is $68,000 ($91,800 fully burdened).
    • To generate qualified opportunities, marketers invest both funds from a budget as well as time managing campaigns.
    • Before the composite organization deploys 6sense, the marketing team’s total budget is 7.5% of annual sales revenue. Of this budget, the marketing team spends 50% on digital marketing efforts (e.g., display advertising, etc.). 2
    • In addition, marketers spend 25% of their time implementing digital marketing campaigns. This includes everything from overseeing creative to setting up campaigns on various platforms, coordinating and communicating with stakeholders, collecting and analyzing data, etc.3
    • After the composite organization deploys 6sense, the marketing team’s budget remains constant. That is, the marketing team’s nominal spending on digital marketing is the same as before. The marketing team and the effort spent on digital marketing also remain the same.
    • However, these same costs in terms of budget lead to more qualified opportunities. 6sense enables the marketing team to target its budget and its efforts more effectively. 6sense also increases productivity by enabling marketers to perform some tasks (e.g., setting up campaigns and reporting) more efficiently.
    • Thus, the total cost per qualified opportunity decreases after the composite organization deploys 6sense and then in subsequent years as the models improve. This difference is counted as a benefit for every additional qualified opportunity.
  • Risks.

    This benefit will vary for the following reasons:

    • Marketing budgets — as well as the percentages of budgets spent on digital marketing — will vary from organization to organization. Some organizations may be less reliant on digital marketing.
    • There are different types of digital marketing (e.g., display ads, email, social, third- and second-party channels, etc.). The channels that perform best and benefit from 6sense the most will vary organization to organization.
    • To calculate this benefit, Forrester assumes that the composite organization’s marketing budget remains constant at the Year 1 level. In practice, organizations may vary their marketing budgets from year to year.
    • Marketer time spend may vary from organization to organization and may be difficult to measure.
  • Results.

    To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of $97,000.

Voice Of The Customer

“We use [6sense] to track the effectiveness of some marketing programs that we don’t even run through 6sense. People say you can’t track marketing return, but with this tool, you can.”

VP, strategic marketing and demand generation, professional services

“We expanded the way we look at content. Now, we look at everything we publish as content, not just the gated pieces.”

VP, growth marketing, cybersecurity

“We’ve shifted our spend towards things that are working — like content syndication — because we paired it nicely with the intent model and the [6QA] account list. We’ve also increased our display spending significantly because, with 6sense, we’ve seen it work, progressing accounts [and] driving content engagement [and] site visits.”

Senior manager, marketing operations, cybersecurity

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Marketing Optimization

Ref. Metric Source Year 1 Year 2 Year 3
B1 Marketers at composite organization Assumption 6 6 6
B2 Marketer fully burdened hourly rate $68,000*1.35/2,080 $44 $44 $44
B3 Percentage of revenue spent on digital marketing 7.5%*50% 3.75% 3.75% 3.75%
B4 Before 6sense: Digital marketing spend per qualified opportunity A10*B3/A5 $1,200 $1,200 $1,200
B5 Total hours spent implementing digital marketing B1*2,080*25% 3,120 3,120 3,120
B6 Before 6sense: Implementation hours per qualified opportunity B5/A5 25 25 25
B7 Subtotal: before 6sense: total marketing cost per qualified opportunity B4+B2*B6 $2,302 $2,302 $2,302
B8 After 6sense: digital marketing spend per qualified opportunity A10*B3/A12 $1,000 $833 $694
B9 After 6sense: implementation hours per qualified opportunity B5/A12 21 17 14
B10 Subtotal: after 6sense: total marketing cost per qualified opportunity B8+B2*B9 $1,918 $1,598 $1,332
B11 Incremental qualified opportunities after 6sense A12-A5 25 55 91
Bt Marketing optimization (B7-B10)*B11 $9,590 $38,680 $88,239
Risk adjustment ↓10%
Btr Marketing optimization (risk-adjusted) $8,631 $34,812 $79,415
Three-year total: $122,857 Three-year present value: $96,282
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Reduction in selling time per opportunity won:
20% to 40%

Sales Optimization

  • Evidence and data.

    Interviewees said that 6sense Revenue AI increased their salespeople’s productivity. While 6sense features can improve efficiency, the interviewees reported that acting on the insights 6sense provided allowed salespeople to realize more significant gains.

    The interviewees reported the following experiences:

    • Shorter sales cycles.

      6sense Revenue AI helped sales identify accounts that were ready to make purchasing decisions. Accordingly, sales cycles for the associated opportunities were significantly shorter.

    • Productivity gains from better prioritization.

      The VP of marketing strategy and marketing operations in the marketing industry explained: “[6sense] helps reps prioritize which MQLs to follow up with first. You [as a sales rep] are going to go after the ‘in-market’ [6QA opportunities] before you go after the [opportunities in other stages like] ‘consideration’ or ‘awareness.’ When it comes to pure prioritization ... we try to standardize on 6sense.”

      Similarly, the VP of strategic marketing and demand generation in professional services said, “If I [as a salesperson] have a limited amount of time and limited amount capacity, [then] I want to focus on [the 6QA accounts].”

    • Productivity gains from enhanced insights.

      The VP of strategic marketing and demand generation in professional services said: “Marketing ... will actually go through [opportunities] for [sales] and [suggest accounts to pursue]. ... We use the information [from 6sense] to let us know what leads ... to go after.” The interviewee explained that, using 6sense, marketing provides sales with additional insights such as search terms for the account or campaigns the account has recently interacted with. The reps are then armed with that info when they reach out.

      Similarly, the senior manager of marketing operations reported: “When sales started following up [with 6QA opportunities], they saw better responses. ... They were able to get more meetings.”

    • Collaboration between marketing and sales.

      The director of demand generation in cybersecurity said: “[Sales no longer complains about] needing higher-quality leads — that’s dropped off the list. ... Before [6sense], it was probably in the top one or two things we heard every time we talked to sales.”

      The VP of growth marketing in cybersecurity similarly said, “We really partnered with different parts of the organization — including field marketing, sales enablement, and sales ops — to continue to be in front of them with this data.”

  • Modeling and assumptions.

    For the composite organization, Forrester assumes:

    • Salespeople earn an annual salary of $89,000 (or $120,150 fully burdened). (This salary does not include commission.)
    • Salespeople spend 50% of their time selling. They spend the rest of their time on other activities (e.g., planning, administrative overhead, travel, etc.).4
    • The minimum selling time to close a deal is 100 hours (a little less than a month).
    • Since some of the opportunities that salespeople work on do not close, Forrester assumes that the selling time for closed/won deals also incorporates some time spent on deals that are ultimately lost.
    • It is important to note that 6QA opportunities are more likely to close. As a result, the time spent on 6QA opportunities yields more opportunities closed/won, and the average selling time per 6QA opportunity is lower (see Table RC and Table RD).
    • Thus, the average selling time per opportunity closed/won at the composite organization decreases. By increasing the percentage of opportunities that are 6QA, the composite organization decreases its aggregate average sales cycle.

    Before the composite organization deploys 6sense:

    • The organization employs 12 salespeople (twice as many salespeople as marketers) to keep up with current volume of opportunities.
    • The average selling time per opportunity closed/won is 780 hours (a little less than five months).

    After the composite organization deploys 6sense:

    • The composite organization hires additional salespeople each year to keep up with the increasing volume of opportunities.
    • Salespeople allocate their time to 6QA and non-6QA opportunities in proportion to the respective volumes of opportunities. In Year 1, salespeople spend 20% of their time on 6QA opportunities; in Year 2, 30%; and in Year 3, 40%.
    • The average selling time per closed/won opportunity decreases even more as the revenue team increasingly focuses on 6QA opportunities. In Year 1, the average selling time is a little under four months; in Year 2, a little over three months; and in Year 3, a little under three months.
    • For the purposes of calculating this benefit, Forrester considers the reduction in average selling time per deal as salesperson productivity gains. Each salesperson handles more opportunities because the average sales cycle is shorter. In addition, 6sense Revenue AI includes time-saving productivity features.
    • Salespeople capture and use 25% of the time saved productively. No one is productive 100% of the time; much of the time saved is captured by unproductive activities.
  • Risks.

    This benefit will vary for the following reasons:

    • Salespeople may adopt 6sense more slowly than expected. Organizational change is inherently difficult, and optimal use of 6sense Revenue AI requires new strategies and processes. Unsurprisingly, the interviewees at the largest organizations reported the slowest rates of 6sense adoption among salespeople.
    • Salesperson time spend may vary.
    • Forrester’s model assumes salespeople devote equal time and effort to all opportunities (both 6QA and non-6QA). In practice, salespeople are likely to devote more time and effort to 6QA opportunities. If that is the case, then Forrester’s model may be conservative and understate this benefit.
    • Shorter sales cycles have the additional benefit of accelerating revenue growth. That benefit to the composite organization is captured by Benefit A: Profit Maximization.
  • Results.

    To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $1.3 million.

Voice Of The Customer

“The models are also based on our customer and partner data so I think that helps instill a lot of confidence [among the salespeople].”

Head of marketing operations, networking

“They give you the ability to make it really easy for sales. … There’s always so much that we can tap into.”

VP, growth marketing, cybersecurity

“We even leverage 6QAs with our [channel] partners. We share the intel and say, ‘Let’s go after this account together.’ [And] they’re blown away by the information we have and our ability to go after the account as partners.”

VP, growth marketing, cybersecurity

“Sales insights [help reps] target specific accounts. [These are] the accounts that sales cares about.”

Head of marketing operations, networking

chart

Sales Optimization

Ref. Metric Source Year 1 Year 2 Year 3
C1 Before 6sense: Salespeople at composite organization Assumption 12 12 12
C2 Before 6sense: Total selling time (hours) C1*(2,080*50%) 12,480 12,480 12,480
C3 Before 6sense: Opportunities closed/won A9 16 16 16
C4 Subtotal: Before 6sense: Average selling time per opportunity closed/won (hours) C2/C3 780 780 780
C5 After 6sense: Salespeople at composite organization Assumption 14 17 21
C6 After 6sense: Total selling time (hours) C5*(2,080*50%) 14,560 17,680 21,840
C7 After 6sense: Opportunities closed/won A16 24 34 47
C8 Subtotal: After 6sense: Average selling time per opportunity closed/won (hours) (RA7*RCt+RB7*RCt)/C7 or C6/C7 607 517 461
C9 After 6sense: Reduction in average selling time per opportunity closed/won (hours) C4-C8 173 263 319
C10 Salesperson fully burdened hourly rate (excluding commission) Assumption: $89,000*1.35/2,080 $58 $58 $58
C11 Percent captured Assumption 25% 25% 25%
Ct Sales optimization A12*C9*C10*C11 $377,000 $686,537 $999,861
Risk adjustment ↓20%
Ctr Sales optimization (risk-adjusted) $301,600 $549,229 $799,889
Three-year total: $1,650,718 Three-year present value: $1,329,059

Selling Time Per 6QA Opportunity Closed/Won (Hours)

Ref. Metric Source Year 1 Year 2 Year 3
RC1 Percentage of qualified opportunities that are 6QA RA2 20% 30% 40%
RC2 Total selling time spent on 6QA opportunities (hours) C6*RC1 2,912 5,304 8,736
RC3 6QA opportunities closed/won RA7 12 22 34
RCt Subtotal: Selling time per 6QA opportunity closed/won (hours) RC2/RC3 243 246 254

Selling Time Per Non-6QA Opportunity Closed/Won (Hours)

Ref. Metric Source Year 1 Year 2 Year 3
RD1 Percentage of qualified opportunities that are non-6QA RB2 80% 70% 60%
RD2 Total selling time spent on non-6A opportunities (hours) C6*RD1 11,648 12,376 13,104
RD3 Non-6QA opportunities closed/won RB7 12 13 13
RDt Subtotal: Selling time per non-6QA opportunity closed/won (hours) RD2/RD3 971 982 1,008

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement 6sense Revenue AI and later realize additional uses and business opportunities, including:

  • Technology stack consolidation.

    The product manager for a media organization described how switching to 6sense Revenue AI consolidated many of their organization’s marketing tools under one solution. They said: “There’s been a massive consolidation [under 6sense]. In terms of ABM platforms, it’s fully consolidated. From what I’m aware of, 6sense is the only kind of ABM intent-based platform that we’re using as an organization. And then there’s been a whole bunch of standard consolidation across other types of products as well. It’s an ongoing process, but there has been a lot of consolidation over the last three to four years.”

  • Strategic alignment within revenue teams.

    The VP of marketing strategy and marketing operations for a networking company said: “We think about [6sense when] we build all of our programs. The support and the attention we get from [6sense] and how they help support us across all of our functions and all of our teams has been really impactful for us as we build out the platform into the rest of our business.” They went on to describe how this gives them a competitive advantage in the market, stating: “[6sense] has created really great synergies between sales and marketing. ... It definitely gives us ... more room to compete with our big competitors.”

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).

Total Costs

Ref. Cost Initial Year 1 Year 2 Year 3 Total Present Value
Dtr 6sense platform license $62,500 $135,000 $172,500 $185,000 $555,000 $466,782
Etr Platform deployment and maintenance $51,000 $17,000 $17,000 $17,000 $102,000 $93,276
Ftr User training $0 $4,915 $5,930 $7,090 $17,934 $14,695
Total costs (risk-adjusted) $113,500 $155,465 $195,575 $209,235 $673,774 $573,663
“[6sense] is the role model for [how] any software [vendor and customer support team] should be operating because they view their success as not just whether their customers are using the platform, but whether they’re getting value out of it.”

Senior manager, marketing operations, cybersecurity

6Sense Platform License

  • Evidence and data.

    The interviewees believed that investments in revenue technology were necessary for their organizations, and they felt that 6sense’s pricing was fair. Two organizations had switched from alternative vendors. However, pricing was not a factor in those decisions. Instead, the interviewees said their organizations switched because 6sense yielded superior results.

    The interviewees also believed that 6sense’s customer support added value beyond what was reflected in the licensing fees for the software. The interviewees all described strong relationships with 6sense as a vendor.

    • The senior manager of marketing operations in cybersecurity said: “[6sense is] constantly updating their product and releasing new features. [And] we’re getting [strong] support from [our] customer support manager — [for example,] they encourage us to do things we’re not doing. [6sense] also [has] this great community, too. ... All of these things have been so transformative, even if it’s not related to 6sense. They’ve helped us improve our processes. ... So [6sense] is so much more than just the [software]. ... It’s a change in our approach and we feel like we’ve got like a team there to help us along the way.”

      They concluded: “6sense was such a great partner to us in that they really gave us access to [best practices]. ... They really provided a lot of training there.”

    • The VP of marketing strategy and marketing operations in the marketing industry said: “I think the world of the [6sense] team. Their product is not perfect — and they would be the first to tell you that — but they truly want me to be successful with it, and I want to be successful with [them]. ... 6sense’s unique value add ... is the partnership. ... [6sense] is not above working to improve their [platform and models’ results for us].”
  • Modeling and assumptions.

    Licensing fees for the composite organization are based on pricing information 6sense provided.

  • Risks.

    Organizations can expect pricing to vary based on features, number of user seats, etc. Readers should contact 6sense for custom quotes.

  • Results.

    To account for these risks, Forrester adjusted this cost upward by 25%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $467,000.

Voice Of The Customer

“We partnered with 6sense to really put together a program and a plan for how [to] launch [within our] organization. … We would not be as successful as we are if we didn’t have a very strong relationship with [6sense’s] customer success people and if they [hadn’t] really partnered with us to achieve success.”

VP, strategic marketing and demand generation, professional services

“We really feel super supported by the 6sense team. They are as committed to helping us be successful as we’re committed to making the platform work for our business. Those are the kind of vendors I like to work with. … 6sense really is a partner for us — they help us.”

Director, demand generation, cybersecurity

chart

6Sense Platform License

Ref. Metric Source Initial Year 1 Year 2 Year 3
D1 6sense platform license Assumption $50,000 $108,000 $138,000 $148,000
Dt 6sense platform license D1 $50,000 $108,000 $138,000 $148,000
Risk adjustment ↑25%
Dtr 6sense platform license (risk-adjusted) $62,500 $135,000 $172,500 $185,000
Three-year total: $555,000 Three-year present value: $466,782

Platform Deployment And Maintenance

  • Evidence and data.

    The interviewees — senior marketing operations managers at their organizations — oversaw the 6sense deployments and maintenance themselves. During an initial deployment period, 6sense trained its predictive models based on the organizations’ historical data and optimized the models to meet the organizations’ business goals. The senior marketing operations managers oversaw the technical integrations, provided input during model development (e.g., detailing business models and goals), reviewed model performance, and developed strategies to rollout the platform organizationwide. Full 6sense deployment typically took about one fiscal quarter with interim benchmarks met along the way.

    Also, the interviewees recommended regularly checking on and retuning the predictive models to keep performance high — for example, when the goals or strategies of the business changed.

    • The VP of growth marketing in cybersecurity said: “Like any technology, you have to have a strategy behind it. ... You can absolutely trust the model[s], but I don’t think you can [expect] 6sense to know your business, turn [the platform] on, and then [create] magic. ... Any company that approaches this strategically is going to be able to trust the [results if they invest the] upfront work [to develop the models].”
    • The VP of marketing strategy and marketing operations in the marketing industry said: “[There] is a sizable ramp time to train the algorithm. [You have] to define the scope of data that you want the algorithm to learn from. It’s important to get that right. ... It’s also important to realize that as [your business] strategy shifts, [you have to update] the algorithm.”
    • The director of demand generation in cybersecurity said: “It’s a good best practice to do due diligence and always check in on your model. 6sense will do that for you. ... We usually do it once or twice a year — just a quick check.”
    • The VP of marketing strategy and marketing operations in the marketing industry said, “There is a need to tweak the model on a semiannual or annual basis and rerun it [based on new] data as your business grows.”
  • Modeling and assumptions.

    For the composite organization, Forrester assumes:

    • Deployment of 6sense Revenue AI and initial training of the 6sense models takes a total of 480 hours (roughly three months).
    • Ongoing upkeep of 6sense Revenue AI — including regular model updates — takes a total of 160 hours (roughly one month) spread out over the course of an entire year.
    • All of this work is performed by senior marketing operations managers, who earn an annual salary of $131,000 (or $176,850 fully burdened).
  • Risks.

    Deployment and maintenance effort may vary for organization-specific reasons. For example, interviewees at organizations with complicated or frequently-changing business models or with low-quality CRM data reported longer model development times.

  • Results.

    To account for these risks, Forrester adjusted this cost upward by 25%, yielding a three-year, risk-adjusted total PV of $93,000.

chart

Platform Deployment And Maintenance

Ref. Metric Source Initial Year 1 Year 2 Year 3
E1 Platform deployment (including initial model training) (hours) Interviews 480 0 0 0
E2 Platform maintenance (including model updates) (hours) Interviews 0 160 160 160
E3 Senior marketing operations manager fully burdened hourly rate $131,000*1.35/2,080 $85 $85 $85 $85
Et Platform deployment and maintenance (E1*E2)*E3 $40,800 $13,600 $13,600 $13,600
Risk adjustment ↑25%
Etr Platform deployment and maintenance (risk-adjusted) $51,000 $17,000 $17,000 $17,000
Three-year total: $102,000 Three-year present value: $93,276

User Training

  • Evidence and data.

    The interviewees noted that some training was necessary for users to take full advantage of 6sense Revenue AI.

    However, in the interviewees’ views, investing in organizational change (i.e., encouraging new practices leveraging 6sense) was more important than platform training. Often, marketing teams adopted 6sense before sales teams. Sales teams were sometimes resistant to new processes, and fostering organizational change was hardest at the largest organizations.

    The interviewees described the following experiences:

    • The director of demand generation in cybersecurity said: “Anytime you roll out a new tool or a new platform, training is important. ... In general, the [6sense platform] is pretty intuitive. ... [However,] it takes time [and] definitely doesn’t happen overnight. We spent the last year ... helping our sales team think from an account [rather than] leads perspective. I think the challenge most organizations [will] face is [changing their prior lead-based processes].”
    • The product manager in media said: “The [primary marketing features are] really straightforward, but ... understanding intent and segmentation [has] a learning curve. ... [However,] as the organization as a whole becomes more comfortable with [6sense], we get better and stronger.”
    • The VP of growth marketing in cybersecurity said: “We did continuous training ... and we’re still doing that today. There are always new features and new processes that we’re implementing.”
  • Modeling and assumptions.

    For the composite organization, Forrester assumes:

    • Users receive initial training on 6sense Revenue AI and then annual training to renew their skills as well as cover new features.
    • Training consists of only instruction on 6sense Revenue AI.
    • Senior marketing operations managers receive an initial 10 hours of platform training and then 5 hours of platform training each subsequent year.
    • Marketers receive an initial 10 hours of platform training and then 2 hours each subsequent year.
    • Salespeople receive an initial 10 hours of platform training and then 2 hours each subsequent year.
  • Risks.

    This cost may vary because change management costs are highly variable. For example, organizations already practicing ABM may have lower change management costs. Similarly, small organizations may find it easier to foster change while large organizations may find that it harder. And the time necessary to effect widespread change will vary from organization to organization.

    Forrester’s model does not calculate change management costs because these are not directly attributable to 6sense and would be incurred by any organization adopting a similar new technology. At the composite organization, organizational change happens before widespread deployment in Year 1.

  • Results.

    To account for these risks, Forrester adjusted this cost upward by 25%, yielding a three-year, risk-adjusted total PV of $14,000.

chart

User Training

Ref. Metric Source Initial Year 1 Year 2 Year 3
F1 Senior marketing operations manager training (hours) Assumption 10 5 5 5
F2 Senior marketing operations managers Composite 2 2 2 2
F3 Senior marketing operations manager fully burdened hourly rate E3 $85 $85 $85 $85
F4 Salesperson initial training (hours) Assumption 10 10 10 10
F5 Salesperson renewal training (hours) Assumption 2 2 2 2
F6 Salespeople receiving initial training Initial: C1; Y1 to Y3: C5-(F6PY-1+F6PY-2+F6+PY-3) 12 2 3 4
F7 Salespeople receiving renewal training C5-F6 0 2 14 17
F8 Salesperson fully burdened hourly rate (excluding commission) C10 $58 $58 $58 $58
F9 Marketer training (hours) Assumption 10 2 2 2
F10 Marketers at composite organization B1 6 6 6 6
F11 Marketer fully burdened hourly rate B2 $44 $44 $44 $44
Ft User training (F2*F3*F1)+((F4*F6+F5*F7)*F8)+ (F10*F11*F9) $11,308 $3,932 $4,744 $5,672
Risk adjustment ↑25%
Ftr User training (risk-adjusted) $4,915 $5,930 $7,090
Three-year total: $17,934 Three-year present value: $14,695

CONSOLIDATED THREE-YEAR RISK-ADJUSTED METRICS
  • icon

    These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.

Cash Flow Chart (Risk-Adjusted)

Cash Flow Table (Risk-Adjusted Estimates)

Initial Year 1 Year 2 Year 3 Total Present Value
Total costs ($113,500) ($156,915) ($195,430) ($209,090) ($674,934) ($574,753)
Total benefits $0 $660,231 $1,280,541 $2,030,804 $3,971,576 $3,184,282
Net benefits ($113,500) $504,766 $1,084,967 $1,821,569 $3,297,802 $2,609,529
ROI 454%
Payback period (months) <6

The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.

NEXT SECTION: Appendixes

Appendix A: Total Economic Impact

Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.

Total Economic Impact Approach

  • icon

    Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.

  • icon

    Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.

  • icon

    Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.

  • icon

    Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”

  • icon
    PRESENT VALUE (PV)

    The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.

  • icon
    NET PRESENT VALUE (NPV)

    The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have higher NPVs.

  • icon
    RETURN ON INVESTMENT (ROI)

    A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.

  • icon
    DISCOUNT RATE

    The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.

  • icon
    PAYBACK PERIOD

    The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.

The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.


Appendix B: Supplemental Material

Related Forrester research

“Defining The Standard: B2B Revenue Waterfall™ Stage Definitions,” Forrester, Inc., January 10, 2021.

“Use The B2B Revenue Waterfall To Manage All Revenue Opportunities,” Forrester, Inc., May 14, 2021.

Appendix C: Endnotes

1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.

2 Source: “The US Digital Marketing Forecast, 2018 To 2023,” Forrester Research, Inc., February 7, 2019.

3 Source: Kent Lewis, “How will marketers spend their time at work post-COVID?,” SEMpdx, 2022.

4 Source: Mark Ellwood, “How Do Sales Reps Spend Their Time?,” Get More Done, January 2016.